Shares of the company were up 3.04 per cent in premarket hours, trading at $36.90.
For the quarter that ended September 30, net earnings stood at $20.8 million or 22 cents per diluted share, compared to a year-earlier net loss of $2.6 million or two cents per diluted share.
Total sales were flat year-over-year at $531.7 million, as advertising growth was offset by a drop in subscribers.
Analysts polled by Thomson Reuters had expected per share earnings of 17 cents on revenue of $521.56 million.
“We just reported the best relative revenue performance in seven years and the second consecutive quarter of year-over-year profit growth, exceeding our expectations,” said chairman and CEO Tim Armstrong.
“We have positioned AOL for growth in 2013 and beyond with consumer and advertiser demand growing for our premium content and innovative products, video, services and ad formats.”
Global advertising revenue grew seven per cent to $340 million, from $317.7 a year earlier. AOL said the increase was largely due to growth in its properties display and third party network revenue, which totaled $248.2 million for the quarter.
In the company’s search and contextual segment, revenue rose eight per cent to $91.8 million, driven primarily by continued double-digit growth in search revenue on AOL.com.
Subscription trends continued to improve, AOL said, with a 10-per-cent decline in revenue year-over-year and a 1.8 per cent monthly average churn – the rate at which subscribers cancel services. This compares to a 22-per-cent decline in revenue and 2.2-per-cent monthly average churn, a year ago.
The company had 2.9 million subscribers in the third quarter, down 16 per cent from 3.5 million a year ago. Average revenue per user grew six per cent to $18.47, from $17.49 a year earlier.
The company said unique visitors to AOL properties were 111 million, growth of four per cent year-over-year.
Earlier this year, the company sold a portion of its patent portfolio to Microsoft Corp. (NASDAQ:MSFT) in a deal worth $1.1 billion. It sold over 800 patents, ranging from online advertising to mobile handsets. Microsoft will also license another 300 patents from AOL.
The New York-based company plans to return 100 per cent of the proceeds from the patent sale back to shareholders.
On December 14, the company will pay a $5.15 special cash dividend to shareholders of record at the close of business on December 5.